Zelensky says Ukraine's budget next year will be a war budget, with focus on defence

More than a trillion hryvnias (S$38.5 billion) in Ukraine's budget will go to the security and defence sector, said Ukrainian President Volodymyr Zelensky. PHOTO: REUTERS

KYIV - Ukrainian President Volodymyr Zelensky said Wednesday that next year's budget would be a war budget, devoting more than a trillion hryvnias (S$38.5 billion) to defence and security spending.

In an evening video address, he also said social obligations such as pensions had to be covered in full. Non-critical expenses must be reduced as much as possible, he added.

Mr Zelensky said he met earlier in the day with Finance Minister Serhiy Marchenko and other officials.

"It is clear that this will be the budget of a country at war," he said. "More than a trillion hryvnias next year will go to the security and defence sector. This is going to be the No. 1 priority."

The government would present plans to reduce spending on state enterprises, officials and institutions that were deemed non-essential, he said.

A special rebuilding fund will be set up to be partly made up from proceeds of the confiscation of Russian assets, he said, repeating an idea Kyiv has raised earlier.

Ukraine has estimated the costs of the war, combined with lower tax revenues, has left a US$5 billion (S$7 billion) a month fiscal shortfall, or 2.5 per cent of pre-war gross domestic product (GDP). That pushes the annual deficit to 25 per cent of GDP, compared with just 3.5 per cent before the conflict. REUTERS

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